The cryptocurrency market is one of the most lucrative in the financial world. This has brought a lot of good fortune to many of its investors and created a strong community of loyal supporters. But, there are downsides to this sector, which have caused huge losses.

 

To this end, it is inevitable to stop mentioning the Tera incident. The coins in that blockchain have dropped dramatically, resulting in billions of dollars in losses for the crypto market in general. The collapse of that blockchain has brought both institutional and retail investors to the brink of bankruptcy.

 

Similarly, it should be noted that this market has recently disappeared with billions upon billions of capitalizations. Despite these negative aspects, digital currencies remain one of the best investment options. This paper shows the main reasons for this statement.

 

Cryptocurrencies are not a fad

While the risks involved in investing in cryptocurrencies are considerable, there are some aspects that make them advantageous. One of them is that these assets are not temporary, but a market in the financial world "with citizenship cards".

 

The latter suggests that, despite the current bad times, it is a market on which important technical and social sectors depend. For the most promising followers of this asset, the current depreciation can be considered as a “purchase opportunity”.

 

Beyond that, it is noteworthy that many sectors cannot stop relying on virtual currencies and their associated technologies. DeFi is one of the most notable examples of the latter in the case of decentralized financing. Among them, the GameFi sector seems to be setting a new trend in the world of video games.

 

Similarly, the development of the Metaverse can be mentioned. Most of the companies developing such future technologies focus on the cryptocurrency market. In fact, it is believed that the money that would allow a liquid commercial exchange between Metaverse would be made up of cryptocurrencies and tokens.

 

Cryptocurrencies are still a good investment

As already mentioned, there are compelling reasons to invest in digital currency just as there is a risk of huge losses. Currently, a growing number of businesses are adopting digital currencies and most countries are working with regulations for them. This may indicate that these currencies are a chronic phenomenon.

 

 

One of the dilemmas of many people today is whether to invest. But, there is another significant number that does not stop betting on these assets even though they are going through a difficult time. Is it reasonable to invest in digital currency despite the recent Lorraine loss story? Here are 4 factors that support a positive response:

 

As already mentioned, there are compelling reasons to invest in digital currency just as there is a risk of huge losses. Currently, a growing number of businesses are adopting digital currencies and most countries are working with regulations for them. This may indicate that these currencies are a chronic phenomenon.

 

One of the dilemmas of many people today is whether to invest. However, there is another significant number that does not stop betting on these assets even though they are going through a difficult time. Is it reasonable to invest in digital currency despite the recent Loren loss story? Here are 4 factors that support a positive response:

 

●      Security.

●      Decentralization.

●      Innovation speed.

●      Asset control.

 

In short, these 4 things that hold cryptocurrency as a successful investment are fundamental. That is the philosophy and purpose for which they were originally created and which formed them as an alternative to the traditional financial system (TradFi), the precise support that ensures the effectiveness of their investment.

 

1) Security

The Bitcoin blockchain has never been compromised and is currently the most secure payment network in the world. Every time a transaction is made through it, it is updated and archived. This is done through numerous anonymous nodes scattered across the planet. The algorithm responsible for encrypting transactions to strengthen security has never presented an error. This is the legendary Sha-256.

 

To get an idea of ​​the security level of this network, it is enough to contrast it with numerous breaches against the Swift system. The global network of banks is risky in many cases, especially in the least developed countries. However, it should be noted that attacks on financial institutions are endless and often successful.

 

In the case of cryptocurrencies, the breach is not so simple. This is due to its decentralized nature, which provides significant benefits against any hacker. In other words, the hacker must control all the nodes at the same time in order to temper a block. This is a virtually impossible task and with some rewards.

 

Certainly, in the world of cryptocurrency, decentralized money has become the subject of many lawsuits. But, the bugs in these applications are the result of developers' carelessness when programming smart contracts that support these protocols. This type of problem is not related to the underlying security level of the blockchain.

 

2) Decentralization

The second of the most important features of digital currency is related to decentralization. The term is synonymous with the fact that these assets do not belong to any central administration, whether they are with the government, banks, or any other entity chain of command. In the case of Bitcoin, it has reached a point where the identity of its creator is a mystery that will probably never be solved.

 

Decentralization is one of the most relevant elements of virtual currency and is closely related to the other three on this list. In other words, security, speed of innovation, and control of resources depend on decentralization. To apply a change to the Bitcoin network, you must have the approval of most miners, which eliminates negative actors.

 

No government can ban its citizens from using cryptocurrency. Under increasing pressure, people may choose other secret currencies like Monroe. Similarly, centralized firms (governments and banks) are unable to freeze funds or block user accounts due to their lack of control over cryptocurrencies.

 

This anarchic quality of virtual currencies allows them to operate seamlessly around the world. Bitcoin moves from one wallet to another and the network does not care about nationality, race, religion, political ideology, and human language. Wherever there is government authoritarian behavior in the world, cryptocurrencies are presented as an alternative.

 

3) Speed ​​of innovation

The third feature that makes crypto a good option for investing is the ability to innovate without big hurdles. Problems like the classification of open source technology, availability of capital, and its many possibilities are inevitable. Digital currencies are characterized by the speed of innovation.

 

Easy access for millions of people without major restrictions and without going through the hierarchy of previous filters is a great advantage. Working with digital currency and blockchain technology is open to anyone who wants to innovate. This allows very young developers to be able to create powerful projects.

 

More than 5 years have passed since the birth of the Bitcoin blockchain, whose sole purpose was to transfer BTC to the birth of the multifaceted chain. Ethereum, created by Vitalik Buterin, a young man under the age of 20, is an example of easy access to this technology for inventors. Thanks to cryptocurrency, great ideas like Etherium will not be born.

 

Since the creation of Ethereum, important innovations have been born in the world of cryptocurrencies. One of them is to integrate decentralized money into many chains and create amazing applications for credit, trade, and even games. The pace of evolution is paving the way for other developments, such as Web 3 and Metaverse.

 

4) Asset control

Finally, the fourth factor that makes cryptocurrencies an effective investment is asset control. Simply put, anyone investing in cryptocurrencies can do so on their own without third-party intervention. Access to those coins is optional through the exchange, banking, or other applications.

 

The same can be said about its custody. Investors have complete sovereignty over their investments. For example, if a user buys Bitcoins for a price or digs them with his tools, he can store them in a self-care wallet. That way, he will be the sole owner of the funds and no one will ever be able to decide for himself how he will use them.

 

The fact that cryptocurrencies are not controlled by a centralized entity allows people to have their own personal keys. In the mantra of cryptocurrency enthusiasts, one of the most familiar is to link ownership to the possession of keys. If a user does not own the private keys to his coins, he does not own his own money.

 

There are two ways to own a cryptocurrency, the first is through a custodial wallet (exchange and other platforms). The second is through the self-custody portfolio. In the first case, users' funds may be confiscated or frozen and their identities may be discovered by a centralized entity. In the second case, none of this can happen.

 

Let yourself know before investing in cryptocurrency

As mentioned at the outset, digital currencies are an important source of returns and their quality does not eliminate the risk of their becoming a long-term asset. There is a lot of potential to lose money in cryptocurrency. So aspiring investors are advised to do their own research.

 

Just as it is done before any kind of investment, it is very important for people to educate themselves about it. For those who are taking the first step in this market, it is advisable to study blockchain, encryption, a white paper published by Satoshi Nakamoto, and other related topics.

 

There are numerous portals on the web, including basic and advanced news and education on the basics of cryptocurrency. Similarly, time should be spent studying the nature of some DeFi projects, such as Ethereum, Solana, or Avalanche, and the steps toward Web3 and Metaverse. The latter is considered a key issue for the future of blockchain technology and for the entire crypto market.